By Christine-Marie Lauture
On June 30th, in a closely-watched trademark case, the U.S. Supreme Court ruled that under certain conditions, an otherwise generic domain name (a generic term combined with a generic top-level domain (gTLD), such as ".com") can obtain trademark registration, rejecting the registration refusal arguments of the United States Patent and Trademark Office (USPTO). Specifically, in an 8-1 decision, the Court stated that "a term styled 'generic.com' is a generic name for a class of goods or services only if the term has that meaning to consumers." Full Opinion: https://www.supremecourt.gov/opinions/19pdf/19-46_8n59.pdf.
As a general rule, a "generic" term, which merely names a good or service rather than distinguishes the source of a good or service, is not eligible for trademark protection. A "descriptive" term, which describes a function or feature of a good or service, is minimally protected - unless the term has acquired distinctiveness or secondary meaning.
Booking.com sought to register the mark "Booking.com" as a trademark. The USPTO previously refused to register "booking.com" as a trademark, arguing that the term "booking" is generic for the company's online hotel-reservation services, and the addition of the gTLD ".com" would not make the mark any less generic. According to the USPTO, gTLD extensions are merely descriptive, similar to a generic corporate designation, like "Inc." or "Company." The USPTO's Trademark Trial and Appeal Board affirmed the examining attorney's refusal to register, finding that "'Booking' means making travel reservations, and ".com" signifies a commercial website...such that customers would understand the term 'Booking.com' primarily to refer to an online reservation service for travel." Additionally, the Board argued that the mark lacked secondary meaning.
The U.S. District Court for the Eastern District of Virginia found that "Booking.com" is not generic, based on evidence of consumer perception. The evidence included a consumer survey showing that 74.8% of respondents recognized Booking.com as a brand name; advertising expenditures associated with its nationwide advertising campaign; and a record of sales success to show that Booking.com is recognized by consumers as a brand name. The USPTO appealed the District Court's decision to the Court of Appeals for the Fourth Circuit, which affirmed the ruling that the mark is not generic. The Supreme Court granted certiorari.
With seven Justices joining, Justice Ginsburg wrote for the Court. Affirming the lower court's ruling, Justice Ginsburg held that it is possible for a "generic.com" name to primarily signify the source of goods or services, in the eyes of the consumer. The Court made clear that the USPTO cannot automatically reject a mark like "booking.com" as generic, but must consider other evidence that shows that consumers associate the mark with a particular source; that the mark has acquired distinctiveness, and is not merely descriptive or generic. Justice Ginsburg stated that "if 'Booking.com' were generic, we might expect consumers to understand Travelocity - another such service - to be a 'Booking.com.'" However, consumers don't "perceive the term 'Booking.com' that way," and thus the term is not generic to consumers.
Concerns of Reliability of Survey Evidence
Concurring with the majority, Justice Sotomayor noted that use of survey evidence is not the "be-all-end-all" in determining whether a mark is generic or merely descriptive, and that the USPTO may have been correct in its determination that the evidence provided by Booking.com was insufficient. Justice Breyer also noted that survey evidence has "limited probative value" in separating generic from descriptive terms.
Justice Breyer was the lone, albeit important, dissent. He began by asking for the very definition of Booking.com, which he noted did nothing more than inform the consumer of the basic nature of its business - thus making it generic. Breyer pointed out (by quoting Ginsburg's own decision in Blinded Veterans Assn. v. Blinded Am. Veterans Foundation, 872 F.2d 1035, 1039 (CADC 1989)) that "[t]he combination of 'booking' and '.com' does not serve to 'identify a particular characteristic or quality of some thing; it connotes the basic nature of that thing' -the hallmark of a generic term." He further stated that a generic term can suggest an association with a specific entity, but that does not mean that it's not generic.
His dissent also highlights the concern that the majority's decision granting the registration for a "generic.com" mark would inhibit, rather than promote, free competition in online commerce. He argues that making such terms eligible for trademark protection may "lead to a proliferation of 'generic.com' marks, granting their owners a monopoly over a zone of useful, easy-to-remember domains."
What Does the Booking.com Decision Mean for Domain Name Owners?
Contrary to the implications for Booking.com's success, SCOTUS's decision most likely will not have a significant effect for businesses across the internet. As a matter of fact, it would not be wise to recommend choosing a mark + generic gTLD as a trademark, especially for start-ups and smaller businesses, The reason why a mark like this would work for Booking.com, American Apparel, and other relevant, otherwise generically named brands, is because of the years of marketing and advertisement established (and the significant amount of money invested in same) in order to successfully have consumers associate those names with their services and goods. This type of consumer association does not happen overnight and not without a significant amount of funds to make it happen. However, for brand owners that have invested heavily in building their brands and acquiring distinctiveness (e.g. "wine.com" and "hotels.com"), this ruling may be considered a victory.
It is important to know that the decision does not negate the requirement that the mark's use must be more than the use of a mere domain name in order to establish trademark rights. A domain name is not a trademark simply because it is a domain name. The domain name must be used as a trademark in order to obtain trademark rights. The gTLD portion of the name must also be used with the name in advertisements and marketing, on the website itself, and in connection with the services rendered. This requirement applies for all domain names, and not only the ones that are otherwise generic or descriptive. The Booking.com decision certainly may expand the availability of trademark protection for generic domain names in the U.S. only if it can be proven that they are in fact considered trademarks by consumers.